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Fiat project collapsing?

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Fiat project collapsing?

– only political intervention can save it

The proposed vehicle assembly joint venture between Italian company, Fiat, and the Harare-based Zimbabwe Automotive Industries which was launched with pomp and ceremony at the Zimbabwe International Trade Fair in 1990 seems to be collapsing. And it appears only political intervention can save it.

The project, which was to be established in Bulawayo, making it the second vehicle assembly plant in the city, is the brainchild of John Mapondera, president of the Indigenous Business Development Centre, who also seems to be heavily involved in property acquisitions and other business projects.

Zimbabwe Automotive industries (ZAI) had already been allocated a stand in the Kelvin industrial area near the high-density suburb of Tshabalala. The stand was sold to ZAI for $513 500 and was to be paid up by July last year.

Bulawayo Town Clerk, Mike Ndubiwa, however, says ZAI still owes the council $168 000 plus interest. Besides ZAI has not submitted plans for the venture for council approval. The council has now warned ZAI that it will repossess the stand. “They (ZAI) will not be an exception.”

Sources say Ndubiwa is now personally in charge of the ZAI file because there are strong feelings that ZAI may use political pressure on his subordinates to stop the repossession of the stand should the vehicle company fail to solve its present problems.

Mapondera first unveiled the project at the 1989 Zimbabwe International Trade Fair when he announced that his company had clinched a deal with Fiat to manufacture their vehicles in Zimbabwe. He said then he was only waiting for government approval to start the project.

In November of that year Mapondera said his company was going to make a wide range of vehicles with the cheapest priced at $11 000 which would have made it the cheapest car in the country and therefore the povo’s choice.

He even said the plant was going to produce 3 500 vehicles a year, quite a feat as even the more established plants are failing to manufacture as many cars. Mapondera went a step further and acquired a premises in the Kelvin industrial for $513 500 making it one of the major investments in a city which had been starved of investment during the six years of political turmoil in the region.

Further proof that the project was on course was provided at the 1990 Zimbabwe International Trade Fair where the Zimbabwe Automotive Industries exhibited a wide range of Fiat and Iveco vehicles ranging from passenger cars to heavy-duty transporters.

The greatest attraction, however, was a range of minibuses appropriately labelled Chova Mubaiwa which the company had earmarked for the emergency taxi operators.

ZAI held a special ceremony at which members of the Zimbabwe Emergency Taxis Association were invited. Vice-President Joshua Nkomo was the guest of honour and it had been widely expected that he would announce the launching of the emergency taxis to replace the ageing and battered Peugeot 404 fleet that are supposed to carry seven passengers but will not take off until 11 have squeezed themselves in.

But, because he was probably aware of the long journey ahead, Nkomo did not do so except encourage self-reliance. Interest in the project was, however, kept alive and in April last year, also during another Trade Fair, vice-president Nkomo “broke the ground” at the ZAI premises to mark the construction of the reportedly $15 million first phases of the plant.

Company officials said the first phase would involve the establishment of facilities to support the existing range of Fiat vehicles.

In July, Barney Mapondera, quoted as the company spokesman said John Mapondera and other company officials had gone to Europe to source the necessary equipment for the plant with deliveries of the first consignment expected that very month.

It was, however, only in January this year that Mapondera hinted that there were some hitches. He admitted that the project was now way behind schedule. He said they were experiencing problems with the designing of the plant but added that he expected this to be sorted out within three months -which meant by this month.

Hopes have now been dashed by the revelation by Bulawayo Town Clerk, Mike Ndubiwa, that the council may be forced to repossess the stand allocated to ZAI because it is both behind schedule with development and payment for the site.

Ndubiwa said ZAI was “now in breach of contract and unless they move with speed they risk having their stand repossessed. … They will not be an exception.”

In response, Mapondera was quoted as saying: “We have had to resubmit plans for the project to our partners in Italy, but we are now finalising the negotiations with them … The only problem I am having now is the shortage of water.”

While Bulawayo is facing an acute shortage of water, especially for construction, sources say the council administration is no longer convinced the project is going ahead and are worried that they may be forced to keep it on their books by political pressure hence Ndubiwa’s statement … “they will not be an exception.”

These sources say the city’s chief executive has now taken possession of the ZAI project file to make sure none of his subordinates are bulldozed to keep the project afloat.

Mapondera has a lot of political influence and support in and from the high echelons. He has easy access to both the President and vice-President Nkomo, who reports say has an interest in the vehicle project.

It is vice-president Nkomo who council administration officials fear could bulldoze the project through even if there is a breach of contract as he has bulldozed several other projects over the council.

Some Bulawayo city councillors, almost all of whom – apart from the independent ones – are former ZAPU members revere their former leader so much that they have vowed they can never stand in his way even if this means bending the rules.

Nkomo’s high hand over the council first surfaced in 1986 when he was allowed to breach the town planning regulations by establishing his Blue Lagoon business complex, which comprises a restaurant, a take-away outlet and a retail shop in an exclusively industrial area.

Located adjacent to the Renkini country bus terminus, there is no doubt that this was a prime business site, but while this action might have been understandable at the time, because the majority of the councillors were ZAPU and both ZAPU and Nkomo has been castigated by the ruling party, further actions were inexcusable.

In 1988, Tandiwe Nkomo, who supposedly runs the Blue Lagoon, was granted permission to establish a laboratory and chemist shop at the same premises.

Three years later, she had changed her mind and wanted to establish a peanut butter factory instead.

This time some councillors raised objections because they were now of the opinion that owners of the Blue Lagoon complex believed they could do whatever they wished regardless of town planning regulations simply because Nkomo was involved.

A few months before that Nkomo had personally stepped in to prevent the auctioning of an industrial stand in the same area that was being leased by the city council to Lewis Antonio who was running a car repair business.

Antonio had been in arrears with his payments for quite some time and proper procedures to auction the stand had been followed but Nkomo drove to the premises on the day of the auction and stopped the sale. This was despite objections from the then mayor Arthur Ncube.

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The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.